The US foreign tax bill sends tensions via Wall Street

While US President Donald Trump’s tariff Play in the American courtsOne of its laws can carry out the US tax system.

Investment banks and law firms warn that this step may be of great importance, such as the impact of duties on investors.

Last week, the “Great Great Law Law”, which went through the US House of Representatives, has the most severe changes in the tax treatment of foreign capital in the United States for decades under a ruling known as Article 899. The legislation must obtain the approval of the Senate.

“We see this legislation creates room for the US administration to turn a trade war into a capital war if it wants it,” said George Saravilus, the global head of FX research at Deutsche Bank on Thursday.

“Article 899 challenges the open nature of US capital markets by explicitly using taxes on foreign property of American assets as a crane of financial to achieve economic goals in the United States,” Saravilus added in the memo.

The draft law of Article 899 says that it will collide with entities from “foreign discriminatory states” – those that impose fees such as digital services taxes that are not proportional to American companies.

France, for example, has a 3 % tax on revenue from online platforms, which primarily target large technology companies such as Googleand Amazonand FacebookAnd apple. Germany And according to what was mentioned A similar tax of 10 %.

The most prominent companies like the London list Compass groupWhich provides food providing services to American schools, and Intercontinental hotelsThat has at least 25 luxurious hotels in the United States, is likely to be affected by the proposed law.

He added: “Given that the net international investment position is sharply negative, there is already room for capital flows if the S899 is already passed through the Senate in its current form.”

The impact of the bill will not be limited to European companies or individuals from those states.

Max Levin, President of the United States at the Law Office, said the draft law “can significantly increase the tax rates applied to some individuals, non -American businesses, government, and other entities.” Linklates.

This means that governments and central banks, which are senior investors, can also be crowded American treasury bonds. France and Germany, for example, held combined 475 billion dollars It deserves US government bonds as of March.

Deutsche Bank added that the proposed tax would reduce the revenues on the US Treasury bonds for these investors as “the actual return on the American treasury will decrease by nearly 100 bits per second.” “The negative impact on the demand for USTS and the financing of twin deficit in the United States at a time when this is the most clearly needed.”

“It is very bad,” said Betan, Chairman of the Swiss -based ADVISORS company. “This is huge – this is just one piece in the general plan and it is fully consistent with what this administration is around.”

“The final judge is not our views, it is the bond market.” “The American bond market deducts these developments, and we have seen in the past few weeks that if there is a safe step for the haven, the investors are clearly clear German bars“

The large Australian pension funds were with American investments It is said that he is concerned about the billSince Australia runs the drug support plan that large American pharmaceutical companies oppose.

Legal experts at Mair Brown Law Company indicate that “major changes can be” made “on the draft law as it passes through the US Senate before being dedicated to the law by Trump.

Mair Brown experts said: “As such, there may be questions about whether the proposal rulings that go beyond tax treaties can be included in the American Senate version of the tax law.”